It’s designed to offer funding to Canadian automotive parts suppliers for “product development and technology demonstration.” The money will be distributed over five years, starting in 2015-16.

Half of the money for the new program will be pulled from the existing Automotive Innovation Fund, according to the budget. That fund, which was designed to offer competitive loan incentives to big companies like Linamar, Ford or Toyota to keep them in the country, was largely unused, said Sandra Pupatello, CEO of the WindsorEssex Economic Development Corporation.

Pupatello said the new focus on the supply chain will let smaller companies tap into research and development money.

Brian Masse, NDP MP for Windsor West, said the government’s decision to pull money from the fund is an indication that its previous approach failed.

“To me, when we see recent failures in the auto industry, it’s a rather shocking approach,” Masse said. “There’s nothing here to adjust their current failures to secure new engines and assembly.”

The Canadian Automotive Partnership Council, comprised of auto companies, parts suppliers, industry associations, unions, academics and government, has been campaigning for an auto strategy including a federal-provincial auto investment board led by an industry expert. The idea is to have a proactive board that would aggressively pursue auto investment and jobs.

The same group also thinks the federal and provincial governments have to be more generous with financial incentives to make Canada more competitive with Mexico or the Southern U.S.

“$100 million for research and development is a nominal amount of money,” said Dino Chiodo, president of Unifor Local 444, which is a member of the Canadian Automotive Partnership Council. He said with dozens of companies just in Windsor that could make use of that fund, about $20 million a year is inadequate.

“I think this federal government has failed us in many ways because from a manufacturing perspective they put us at the back of the line. They put all of their expectations in oil and now that oil is not selling they’re scrambling to figure out what to do next,” he said.

“Instead of using good comprehensive progressive tools that are here, in front of us, they’re trying to in an archaic fashion, throw money in the air and say, ‘here, look what we’re going to give you.’”

Chiodo said he’s concerned the government’s focus on research and development could mean the investment will go toward coming up with new ideas that will then be manufactured in another country, losing out on more auto jobs in Canada.

Jeff Watson, Conservative MP for Essex, said this is the first time the government has allocated money to help small auto parts suppliers in the Windsor-Essex region.

“I don’t think we’d want to limit a parts supplier who is employing people in Essex County to an auto part that only goes into a vehicle that’s assembled in Ontario. We would not be helping our auto supply chain grow or stay here, for that matter. That’s small thinking,” he said.

Matt Marchand, CEO of the Windsor Essex Regional Chamber of Commerce, said the new program is a recognition of the importance of the automotive sector.

“Hopefully this could be the beginning stages of an automotive/manufacturing strategy for Canada and Ontario,” he said.

Watson said he’s not convinced the government could ever do enough to get approval from its critics.

“The government has a national auto action plan. We have since 2008,” he said. “To suggest the government hasn’t had one or doesn’t have one is wrong.”

The budget also includes $65 million to business and industry associations aimed to help them work with post-secondary institutions at making programs match the needs of employers.

That’s something Mayor Drew Dilkens said is crucial for a region where tool and die companies struggle to find enough trained workers.

The budget also extends the capital cost allowance program to 2025. The program, which gives companies tax benefits on new equipment purchases, was supposed to end this year.

It’s something Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association, said will help make local companies more competitive.

Peter Frise, of Auto21, a network of centres of research headquartered at the University of Windsor, said it’s not clear yet how the new program will work, but the supply chain focus is a good sign. It’s not known if it will offer loans or grants, nor is it known if the application process will work. Frise said most Canadian automotive jobs are actually in the supply chain.

“I’m delighted that the government has recognized the challenges and the opportunities that the industry has before it and they’ve obviously agreed that the auto industry has a bright future in Canada,” he said.

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